PE Union Action

Could the current sluggish secondaries market lead to a rush of GP-led transactions in the new year?


How’s your week going?

One thing I noticed is that the secondaries market, which I love to cover, has slowed almost to a halt. Most sellers are waiting until the first quarter to bring new processes to the market. Meanwhile, many buyers spent their capital for the year in the first three quarters. So not much seems to be transacting right now. Sources have told me they expect January to be busy.

An interesting aspect of this year’s secondaries market was GPs being proactive about approaching advisers for options on older funds. Generally, advisers burn out their phones calling GPs about potential deals, but perhaps that dynamic has shifted a bit, especially as higher profile managers have gotten deals done. Once a manager with the name recognition of a TPG or Warburg Pincus completes a deal, everyone else wants to know how they did it.

If this dynamic holds true through next year, then it’s likely we’ll see a large crop of GP-led transactions like fund restructurings next year. It will be interesting to see which high-profile manager decides to use the secondary market to sort out an older fund next year. Hit me up with your thoughts.

Drama: LP watchdog Justin Mitchell has an interesting piece about a union approaching PAI Partners’ public system LPs about the firm’s investment in Areas, a global airport concessions firm. Areas USA runs concessions operations for at least nine airports in the US, several of which have had labor relations issues in recent years, stretching back to before the acquisition.

Areas has resolved disputes at Los Angeles International Airport and Detroit Metropolitan Airport. The company refused to sign a labor peace agreement with Unite Here at Minneapolis-St. Paul International Airport, where the union represented employees of another vendor before Areas won the contract in 2017, Mitchell wrote. The company has not re-hired laid-off workers from the previous vendor despite assurances it would do so, according to a report from the union.

Unite Here voiced concerns at recent Los Angeles County Employees Retirement Association meetings. LACERA CIO Jonathan Grabel wrote in a memo that the pension was in active talks with PAI and maintains a “manager scorecard” with five core components, including “ESG integration.”

“PAI is in the process of developing a work plan for the newly acquired company,” Grabel wrote. PAI didn’t respond to comment requests.

Check out the full story here.

Top Scoops

Partners Group agreed to buy EyeCare Partners from FFL Partners for an enterprise value of about $2.2 billion, Sarah Pringle writes over at PE Hub. The deal follows a PE Hub report in early December naming Partners Group as a contender in the Moelis-run auction for FFL-backed ECP. Check it out.

LLR Partners acquired a majority stake in Geoforce, which provides cloud-based technology for connected field equipment in the oil and gas industry, according to reporter Milana Vinn. LLR invested in Geoforce out of LLR Equity Partners V, which closed on $1.2 billion in June 2018, Vinn wrote. Read it here.

That’s it! Have a great rest of your day. Hit me up as always with tips n’ gossip, feedback or just to chat at, on Twitter or find me on LinkedIn.